When Technology Changes the Rules December 10, 2013

This week my classmates and I were asked to take a stance on the HarperCollin’s eBook policy and all the controversy it created, write a short essay with three arguments, read our classmates’ responses, then post our final thoughts to our blogs. I had not heard about the change in eBook policy or the subsequent outrage of librarians across the country prior to taking this course, but I completely understand why HarperCollins updated the policy as well as why librarians were upset about the limitations it created. Basically, for approximately ten years HarperCollins had been providing eBooks to libraries with no limitations on how many times patrons could check them out. Few titles were available and sales were an insignificant percentage of overall book sales. After watching eBook sales increase and the technology and availability of titles improve, HarperCollins revised their policy to limiting each book purchase by libraries to 26 circulations, so a library with a two-week check-out period could see books “expire” after a year assuming they are perpetually checked out. I felt as though many of my classmates would choose to side against HarperCollins considering we are all students, many are educators, and a few are librarians, so I chose to take what I believed to be the less popular stance.

In my opinion, it seems as though HarperCollins had sufficient reason to change their policy. Businesses are in existence to make money, yet they must also continue to “do good business” to be able to continue doing business, otherwise customers will not return and the company will eventually go bankrupt. HarperCollins was in the right about updating its policies because it was doing so in everybody’s best interest. The company attempted to be proactive with actually providing eBooks to libraries ahead of other companies at the time, explored and developed a profitable business plan in what was and continues to be a paradigm-shifting market, as well as committed themselves to protecting all vested parties including the author and the publisher as well as librarian and patron when they revised and limited their library eBook policy to 26 circulations.

Ahead of the Game

Soon after the policy changes and subsequent uproar from librarians across the country commenced, Josh Hadro (2011) pointed out that HarperCollins was the first major publishing company to revise its e-book to libraries policy at a time when some publishing companies such as Macmillan and Simon & Schuster were not offering eBooks to libraries at all. How forward-thinking of HarperCollins for understanding that eBooks would become more popular as the technology became more affordable and the availability of titles increased. By even having the technology and business market already established with libraries, they were actually at the forefront of exploring the possibilities of digital libraries; it only made sense they would need to break e-business ground and be the first to revamp their eBook business model.

The Rules Change

One of HarperCollins’ major justifications involves both the cost to produce and the cost to replace, or rather what happens when an original work never needs replacing. Creating a digital version of a printed work essentially makes it more permanent as well as easily duplicated leading to a variety of problems including copyright violations, decreased sales, and loss of income for authors. In essence, because the technology changed, the rules needed to change. In his letter to OverDrive Library Partners, CEO Steve Potash indicated publishers were already “expressing concern and debating their digital future where a single eBook license to a library may never expire, never wear out and never need replacement” (para. 9). Consider the difference in cost and labor between creating a physical book and a digital book, plus physical books must be packaged and shipped increasing the overall cost to librarians. Then books are handled and experience normal “wear and tear” or perhaps are damaged or lost. The original price drops as the book decreases in popularity and is released in paperback, so repurchasing a physical book becomes less expensive over time. However, the original cost of the book assures authors and publishers receive their cut while the library receives an item it can reuse for years. Obviously the cost to produce a digital version is considerably less, but the publisher and author must receive their due share. Publishers can then offer titles for considerably less than a traditional print book which reduces their immediate profit but understanding they can then offer the book at lower and lower prices each time the circulation license expires ensuring the book is proportionately just as affordable as well as profitable over the same period of time. Brilliant of HarperCollins to come up with a ground-breaking yet controversial plan while considering and attempting to balance the needs and missions of all those involved!

It’s Your Move

But the bigger picture becomes clearer when we step back from the frontline and find out the game is not over. Can and will HarperCollins revise their policy again? Yes! Businesses cannot remain stagnant in their plans and models. They must study their business, trends, markets, technologies, etc. and modify themselves to continue to earn the profits which allow them to continue what they do. HarperCollins watched the eBook market expand and technologies change and respond to this accordingly rather than watching margins dwindle. In the letter from HarperCollins’ President of Sales Josh Marwell (2011), when they looked to the future and saw that unlimited reuse of eBooks would eventually “undermine the emerging e-book eco-system, hurt the growing e-book channel, place additional pressure on physical bookstores, and in the end lead to a decrease in book sales and royalties paid to authors” (para. 3) they knew something must be done. Perhaps this is just the beginning of a series of policy changes needing to be made as better technology develops. Consider how the availability of multiple platforms will be complicating matters more as the market grows. Or what will happen to all those digital books when the technology has evolved to something different and better . . . been to a Goodwill lately and seen all the 8 track tapes?